Wellness Plans Can’t Offer Discounts for Medical Questionnaires, Exams Starting in 2019

Regulations governing how wellness plans offer discounts on health premiums are set to sunset in January 2019, and with no prospects of replacement regulations in sight at the Equal Employment Opportunity Commission, this means that the shackles will be lifted on the plans.

The rules which allow an employer to grant up to a 30% discount on health insurance premiums to employees that fill out health questionnaires or take various health evaluation tests, were found to be “arbitrary” by an appellate court judge about a year ago. But, to avoid disruption in the marketplace and for employers who had already set their wellness plans in motion, the judge ordered the regulations to sunset on Jan. 1, 2019.

The judge agreed to delay the sunsetting to that date to allow the EEOC to write up new proposed regulations for wellness plans.

In making his order, he instructed the agency to write new regulations by August 2018. However, in March, the EEOC announced that it had no immediate plans to issue new wellness regulations regarding the definition of “voluntary.”

 

Why are the regulations sunsetting?

In July 2016, the EEOC issued rules under the Americans with Disabilities Act (ADA) and the Genetic Information Non-discrimination Act (GINA) stating that, in connection with such plans, employers could implement penalties or incentives of up to 30% of the cost of self-only coverage to encourage employees to disclose ADA-protected information, without causing the disclosure to be involuntary.

The disclosures in question would be part of wellness program questionnaires and exams designed to help employees improve their health and fitness.

The American Association of Retired Persons filed suit challenging the regulations and a federal district court in Washington, D.C. nullified the EEOC’s rules for how employer wellness programs could be offered in compliance with the ADA and GINA.

Beginning Jan. 1, 2019, companies may no longer assess penalties (some of which triple what an employee pays for health insurance) to workers who decline to participate in wellness questionnaires and exams.

With no guidance forthcoming from the EEOC, affected employers will need to make a decision. Should they continue with current programs, considering the risk of EEOC enforcement or private legal action, or should they come up with a plan B?

While it may be tempting to expect the EEOC to come up with regulations that are similar to the current ones but in compliance with the court’s decision, that could come back and haunt you.

Pundits suggest creating a path for employees this year that allows them to achieve their full points total without medical exams or inquiries. You can put together a plan that focuses on other wellness issues that they can instead participate in.

Some alternatives to medical questions and exams that employers may want to consider are:

  • Healthy lifestyle training.
  • Distributing Fitbits or similar fitness trackers.
  • Allowing employees to participate in online health education games.

What’s next?

Considering the Trump administration’s history on regulatory matters, it’s likely things will revert to the old guidance for wellness plans: that employers could neither require participation nor penalize employees who do not participate.

But for now, employers need to tread carefully and should consider changing their wellness plan rules if they include incentives for medical questionnaires and exams.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

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